Effective Date Delayed For CFTC Swap Rules Affecting Retirement Plans

In an effort to impose some controls on an industry that was largely unregulated, Title VII of the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010 mandated a sweeping overhaul of the regulation of the swaps market. The Dodd-Frank Act created a new registration category for "major swap participants" (MSPs) – entities who engage in substantial swap activities, but who are not swap dealers – and authorized the Commodity Futures Trading Commission (CFTC) and the Securities Exchange Commission (SEC) to issue rules further defining the term. The Dodd-Frank Act also charged the two agencies with implementing new business conduct standards for both MSPs and swap dealers.

The CFTC issued proposed regulations in December 2010 on both the regulation of MSPs and the business conduct standards, but have yet to finalize them. Until the rules are finalized, the CFTC has postponed the effective date of the swaps provisions under the Dodd-Frank Act, which were